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Chairman Lucas and Ranking Member Peterson. My name is Ken Bentsen and I am Acting President and CEO of the Securities Industry and Financial Markets Association (SIFMA). SIFMA appreciates the opportunity to testify on several important legislative improvements to Title VII of the Dodd-Frank Act relating to derivatives being considered by the House of Representatives.
As you know, the Dodd-Frank Act created a new regulatory regime for derivative products commonly referred to as swaps. Dodd-Frank seeks to reduce systemic risk by mandating central clearing for standardized swaps through clearinghouses. capital requirements and collection of margin for uncleared swaps; to protect customers through business conduct requirements; and to promote transparency through reporting requirements and required trading of swaps on exchanges or swap execution facilities. SIFMA supports these goals. There have been significant and constructive reforms put in place that market participants have implemented. Late last year, firms engaged in significant swap dealing activities were required to register with the CFTC as swap dealers and became subject to reporting, recordkeeping and other requirements, many more of which will be phased in over time. This week, the first swaptransactions were required to be cleared at central clearinghouses to decrease systemic risk in the swap markets. These accomplishments will make our system safer, and it is important thatmarket participants realize that these changes represent real progress.
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